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Sustained Bounce Higher Raises Speculative Question

The past few days of trading has seen the USD/SGD sustain its highs after bouncing higher as financial houses are growing more cautious.

The USD/SGD is trading near the 1.33400 ratios as of this morning, having been able to sustain a near-term higher price range the past few days.  After trading near lows around the 1.32025 mark last Thursday, the USD/SGD has correlated to the broad Forex market remarkably well. This while demonstrating a rather intriguing week of technical trading and a rather remarkable comparison to the currency pair’s one-month results too.


The USD/SGD has essentially been trading between a price of 1.32300 to 1.33800 the past month with outliers happening occasionally.  This value range will prove interesting for both investors and day traders because it highlights the speculative action in the USD/SGD, while also highlighting a certain degree of caution. The highs of the USD/SGD currently are politely within this range and the past week of trading has not gone outside of these values either while producing fast reversals on bounces.

Financial institutions are clearly looking ahead and trying to decide what the U.S. Federal Reserve is going to do in nearly two weeks. While most analysts have concluded the U.S. central bank is going to definitely raise the Federal Fund’s Rate by 0.25% on the 3rd of May, what financial houses are arguing about is if the Fed will also raise interest rates in June by another quarter of a basis point.

  • The lack of clarity regarding interest rates has created a cautious trading environment which has produced choppiness in the USD/SGD.
  • The ability to trade towards lows late last week demonstrates that financial houses have a long-term bearish attitude about the USD/SGD, believing when interest rates are paused the USD will grow weaker.
  • Day traders could be enticed to try and take advantage of the price range delivered the past month to try and figure out where daily support and resistance levels will create fluctuations, but this could prove to be difficult.
  • Risk management is essential while betting on the USD/SGD for short-term endeavors.

A move higher yesterday which produced a test of the 1.33800 has exhibited a calm reversal lower. Traders may find their best results coming from following short-term momentum within the USD/SGD as it seeks to support and resistance levels which appear to be in play not only this week but the past month. Day traders should use cautious risk-taking tools in the near term as financial institutions clearly wait on the impetus that will move the market until then choppy conditions should be expected by speculators.

Current Resistance: 1.33575

Current Support: 1.33275

High Target: 1.33810

Low Target: 1.32925


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